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EU Funds Absorption Rate and the Economic Growth

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  • Claudiu-Tiberiu ALBULESCU

    (Politehnica University of Timisoara, Romania)

  • Daniel GOYEAU

    (University of Poitiers, CRIEF, France)

Abstract

After the financial crisis burst out, a large number of European countries, especially the new members, focused on the EU funds absorption in order to restore their economic growth. The EU funds are considered an attractive tool for financing investment opportunities, in particular in times of crisis, when the private investments decrease. Nevertheless, little was done to empirically document their role in supporting economic growth on short-term, at macroeconomic level. Therefore, we perform a data panel analysis for the EU countries and we apply a system GMM estimator, in order to see to what extent the EU funds absorption rate impacts upon the short-term economic growth rate in the EU member states. We find that the absorption rate, either for the cohesion funds for growth and employment, or for the rural development funds, has no effect on the short-term economic growth rate. In addition, for both categories of funds, the impact of the absorption rate in the case of the net beneficiaries group is negative. However, these results lack in robustness as they are not confirmed for the new member states group.

Suggested Citation

  • Claudiu-Tiberiu ALBULESCU & Daniel GOYEAU, 2013. "EU Funds Absorption Rate and the Economic Growth," Timisoara Journal of Economics and Business, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 6(20), pages 153-170.
    • Handle: RePEc:wun:timjeb:tjeb:v06:y2013:i20:a04
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    4. Belke, Ansgar & Haskamp, Ulrich & Setzer, Ralph, 2016. "Regional bank efficiency and its effect on regional growth in “normal” and “bad” times," Economic Modelling, Elsevier, vol. 58(C), pages 413-426.
    5. Anca Simina Popescu, 2015. "The Influence Of Community Financial Instruments On The Economic Growth," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 0, pages 476-483, December.
    6. Stoyan Tanchev & Mariyan Terziev, 2018. "EU funds and economic growth in Bulgaria," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 72-83,84-94.
    7. Belke, Ansgar & Setzer, Ralph & Haskamp, Ulrich, 2016. "Bank efficiency and regional growth in Europe: new evidence from micro-data," Working Paper Series 1983, European Central Bank.
    8. POP Andrada, 2020. "Eu Funding €“ A Positive Impact On Gdp?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 89-98, July.
    9. Suciu Teodora Maria, 2024. "Factors Influencing The Absorption Of Eu Funds For The Last Members States Economy In European Union," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 193-205, June.
    10. Marcin J. Piątkowski, 2020. "Results of SME Investment Activities: A Comparative Analysis among Enterprises Using and Not Using EU Subsidies in Poland," Administrative Sciences, MDPI, vol. 10(1), pages 1-26, January.
    11. Kalina Durova, 2018. "The impact of European Union funds on the economies of the Central and Eastern European countries," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 95-112.
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    More about this item

    Keywords

    EU Funds; Absorption Rate; Economic Growth; System GMM Estimator.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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